Currency wars are also known by the term competitive devaluation. In today’s age of fluctuating exchange rates, where currency values are determined by market forces, currency depreciation is usually initiated by a country’s central bank through economic policies that can force currency depreciation, with operations like interest rate cuts or increasingly, quantitative easing. Historically, currency depreciation has not been the best choice in strengthening the competitiveness of large world economies. Each country has different motives for weakening its national currency, but a country that pursues a policy of competitive devaluation strongly pursues its own interests by means that tend to exacerbate the economic problems of other countries. Devaluation is used to artificially equalize the trade balance through an increase in income received from foreign exchange transactions, an increase in demand for the country's goods, and ultimately an increase in its own production. On the other hand, the shortcomings arising from the devaluation of the own currency are the decline in living standards, distrust in the domestic currency, the withdrawal of money from the country and the weakening of the financial and banking markets. When countries enter a currency war and devalue their currencies in response, they damage the entire global economy. The policies pursued by the central banks of countries introducing competitive devaluation have been widely criticized for exacerbating global conomic problems. In general, there is a decrease in the volume of international trade. The paper highlights the causes and consequences of currency wars.